Wednesday, November 26, 2008

This post has become a tradition for me on this blog, with excerpts from a posting at the Foundation for Economic Education . Many may also have heard this story as told by Rush Limbaugh on his radio show.

Thanksgiving was not about the Pilgrims embracing diversity and thanking the Indians for helping them survive. The celebration was about thanking God for the abundance which resulted from a move away from socialism ( imposed on them by the Colony’s Sponsors) to free market agriculture.

As governor William Bradford commented on the dreadful conditions of 1622:

“The experience that was had in this common course and condition, tried sundry years and that amongst godly and sober men, may well evince the vanity of that conceit of Plato's and other ancients applauded by some of later times; that the taking away of property and bringing in community into a commonwealth would make them happy and flourishing; as if they were wiser than God. For this community was found to breed much confusion and discontent and retard much employment that would have been to their benefit and comfort. For the young men, that were most able and fit for labor and service, did repine that they should spend their time and strength to work for other men's wives and children without any recompense. The strong… had no more in division of victuals and clothes than he that was weak and not able to do a quarter the other could; this was thought injustice."

In 1623, they moved away from Socialism and embraced the incentives of private property and capitalism:

“They had very good success, for it made all hands very industrious, so as much more corn was planted than otherwise would have been. The women now went willingly into the field, and took their little ones with them to set corn; which before would allege weakness and inability; whom to have compelled would have been thought great tyranny and oppression…By this time harvest was come, and instead of famine, now God gave them plenty, and the faces of things were changed, to the rejoicing of the hearts of many, for which they blessed God.”

The first Thanksgiving was a great example of agricultural productivity, given the proper incentives.

Friday, November 14, 2008

" There is no doubt that food issues will be increasingly important in coming years, as agriculture is stressed by climate change, dwindling petroleum supplies, and environmental degradation in the form of loss of biodiversity and erosion."

and

"traditional agriculture and the industrialization of food have led people to wage war against nature, against each other, and even against their own bodies, in the form of cancers and obesity. The industrialization of food has led to empty countrysides both here in the U.S. and in India, Ms. Shiva’s native country."

Then colleges of agriculture are blamed:

"The so-called Green Revolution, which created fertilizer-dependent industrial agriculture, is a result of research done at colleges and universities. “The solutions will have to come out of the place where it started”

I assert that both industry and universities have addressed all of these issues quite well by helping to bring biotechnology to the world.

The article is supposed to be about gardening and asserts that 'middle-school students are learning about agriculture and cuisine by growing gardens.'

That is great, but great harm is also being done if these kids are not learning about the tools of modern agricultural biotechnology, and even worse if they are being taught that it is harmful!

Sunday, November 09, 2008

A fairly recent Newsweek article entitled : ‘Spread The Wealth? What’s New?’ argues that progressive taxation inherently spreads wealth and is nothing new in American politics. It is essentially asserted that even the Bush and Regan tax cuts maintained a 'progressive' tax system, and because of this, both Bush and Regan polices could be labeled 'socialist.'

Here is the crucial point the author purposefully ignores: It is not necessarily the method of taxation that can be characterized as being ‘socialist’ . More important is the purpose for which the taxes are levied.

According to the Blackwell Encyclopedia of Political Thought (Oxford,1987) Socialism is the ‘theory of social nature or aspects of production and of its consequences.’ Specifically it involves the argument ‘that economic production has an essential social as distinct from individual element , and that this requires public investment and justifies a public share and distribution of rewards.’

So then, where does capitalism end and socialism begin? A recent article by economist Walter E. Williams of George Mason University describes this well:

‘Under laissez-faire capitalism, government activity is restricted to the protection of the individual's rights against fraud, theft and the initiation of physical force.’

Taxation to support the government’s role to provide national defense, provide police protection, or fund the courts and define property rights are clearly not ‘socialist’ by nature, regardless of how taxes are levied, progressive or not.

What about increasing taxes on the wealthy to fund public housing, to fund health care, give tax refund checks to the middle class, or forcing businesses to pay a minimum wage, or increasing social security taxes? These policies seem could be seen as one approach to making a claim on the public’s share in the distribution of the rewards of production. It is understandable that some would refer to them as having a ’socialist’ flavor.

The author is correct about what appears to be a ‘bipartisan consensus that has favored federal spending at approximately the same level for the past 40 years.’

I can’t close without pointing out that the author inaccurately claims that :

‘What has changed in that period is the way the market has distributed wealth. Since the 1970s,income inequality in the United States has increased dramatically’

First, and most importantly, the author fails to point out what this same data reveals: Wealth and income has increased for both the 'rich' and the 'poor' dramatically since the 1970's.

Anyone that understands economics, understands that markets do not distribute income or wealth. Income is earned and wealth is attained based on the valuations that individuals place on what is produced. As Hayek and Mises pointed out long ago, ‘the absence of human intention in a spontaneous order is neither just nor unjust’.

Wednesday, November 05, 2008

I hope that yesterday's election was more a referendum on the Bush administration ( although I believe history will prove him to have been a great American hero)and much less an endorsement for socialism.

That being said I congratulate our new president, and hope to turn back to topics in Agriculture for future posts.

About Me

My primary interests are in applied econometrics with applications related to genomics, nutrition, health, and the environment. I have a quantitative and analytical background in the areas of applied economics and statistical genetics. I leverage my training with experience in machine learning and predictive modeling using SAS, R, and Python to solve problems. I can understand and produce peer reviewed research and discuss the application with a scientist, sales representative, or the customer whose problem ultimately drives the analysis. I can code my own estimators, execute SQL queries, parse text files, and visualize a social network.